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NIMASA FAQ.

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WHAT ARE CABOTAGE VESSELS?

These include but not limited to Passenger Vessels, Crew Boats, Bunkering Vessels, Fishing Trawlers, Barges, Off-shore Service Vessels, Tugs, Anchor Handling Tugs And Supply Vessels, Floating Petroleum Storage FPSOs & FSOs, Tankers, Carriers and any other craft or vessel for the carriage on, through or under Nigerian waters of persons, property or any substance whatsoever.

WHAT VESSELS ARE EXEMPTED UNDER THE CABOTAGE ACT ?
  1. Vessels engaged in salvage operations for the purpose of rendering assistance to persons or aircraft in danger or distress. This does not require any prior approval from the Minister of Transportation.
  2. Vessels engaged in commercial salvage operations provided the Minister is satisfied that the operation is beyond the capability of wholly Nigerian owned salvage vessels. This is intended to cover salvage contracts that have no emergency considerations or immediate danger to life and property.
  3. Vessels owned and operated by Nigerian Armed Forces and Government paramilitary Agencies.
  4. Vessels owned and operated by Nigerian Customs Services.
  5. Vessels owned and operated by the Nigerian Police Force.
  6. Vessels owned and operated by the Federal or State Ministries and or their Agencies provided the vessels do not engage in commercial activities.
  7. Vessels engaged with the approval of the Minister of Transportation or any other Government agency in marine pollution emergency.
  8. Vessels engaged in oceanographic research with the approval of the Department of Fisheries or the Ministry of Foreign Affairs.
What is PLI ?
PLI is acronym for Primary Lending Institutions. These are commercial banks accredited to the CVFF. They contribute 50% of the total Fund, provide an irrevocable and unconditional guarantee of NIMASA 50% contribution to the Fund and manages the Fund while NIMASA provides Fund Administration and Fund Corporate governance. FMOT is the 3rd party to the Fund and has oversight functions while the obligor (i.e. an applicant that has accessed the Fund) is the 4th party. This arrangement ensures that the Fund is managed purely as a commercial facility to ensure success of the Fund for growth of Cabotage trade in the Country.
WHAT ARE THE FOUR PILLARS OF CABOTAGE ?
  1. REGISTRATION
  2. OWNERSHIP
  3. BUILDING
  4. MANNING
Who are the PLIs ?
Fidelity Bank, Skye Bank, Sterling Bank, and Diamond Bank.
What is the tenure of CVFF loans ?

Maximum of Seven (7) Years.

What is the interest rate Applicable ?
The CVFF to be disbursed in US Dollars to beneficiaries on a single-digit interest rate of 5.6%, 0.25% processing fee.
What is the purpose of the Fund ?
a) The facilitation of the acquisition and ownership of vessels to be employed in the domestic/coastal trade by indigenous Companies and Nigerian citizens.
b) Facilitation of vessel Charters.
c) The development of shipyard/maritime infrastructure to facilitate vessel construction, repairs and maintenance.
d) Other shipping auxiliary projects relating to the development of local tonnage capacity and shipyards.
WHAT ARE THE DIFFERENT TYPES OF VESSELS REGISTRATION AND PARTICIPATION IN CABOTAGE ?
  1. Nigerian Wholly Owned Vessels
  2. Bareboat Chartered Vessels
  3. Joint Venture Owned Vessels
  4. Fully Foreign-Owned Vessels
  5. Exempted Vessels
WHAT ARE CABOTAGE TRADE AREAS ?
  1. Nigerian Inland Waters and Lakes
  2. Nigerian Coastal Waters
  3. Nigerian Territorial Waters
  4. Nigeria’s Exclusive Economic Zone
  5. Islands (Natural/artificial) Within Nigerian Waters – Platforms, Rigs, Floating Workshops and Other Such Structures and
  6. Any Carriage in, Under, or on Nigerian Waters
How can I apply for CVFF Loan ?

You can apply by writing an application to access the loan to the Director-General of NIMASA, attention Director, Cabotage Services. Including in your application, the following information with back-up documents as applicable:

  1. Name of the Company.
  2. Address of Company.
  3. Year of Incorporation/Registration Number.
  4. Amount and tenure of the loan
  5. Number/Type/Size of the vessel to be procured (Purpose).
  6. Evidence of other Cabotage investments e.g. Building or Repair of Shipyards, Establishment of Maritime Academy etc (Please specify).
  7. Company’s Share Capital.
  8. Degree of maritime activity.
  9. The number of vessels presently owned.
  10. Contract(s) with International Oil Company, if any.
  11. Benefits of investment to Nigerian Cabotage Regime.
  12. Indicate preferred PLI if any.
  13. Applications are forwarded to PLIs who after due diligence present a list of qualified applicants to NIMASA which in turn presents to the Honourable Minister of Transport for approval.
What is the maximum amount applicable ?
Not more than 25M U.S. Dollars.
What is the eligibility of applicants to the Fund ?
  • Full and complete compliance with Cabotage Act and the CVFF Guidelines (Ensure that you collect a copy of each from Cabotage Department of NIMASA and study them carefully).
  • Domiciliation of Company’s Account with PLI of your choice.
  • Full condition Survey Report on vessel to be procured, (for existing vessels) .
  • Legal Mortgage on vessel to be procured.
  • Comprehensive Insurance of procured vessel.
  • Vessels must be built in Nigeria or has waivers.
  • The company must be owned by Nigerians or have atleast 60% Nigerian Joint Venture participation.
  • Vessels must be manned by Nigerians or has Waivers.
  • Registered under the Cabotage Special Register of Nigerian Ship registration Office in NIMASA.
    Must be Nigerian flagged.
  • Payment of Cabotage dues (2% Surcharge, License and waiver fees, fines).
  • Existing contract with International oil Company(ies) (This is a deciderator).
  • Positive cash flow analysis by PLIs
  • Prepare bankable feasibility reports which report shall be subject to independent verification by NIMASA and the PLIs.
  • Availability of the Company’s succession plan.
  • Must meet with other key Risk Acceptance criteria of PLIs namely:
  • A competent and developed firm of Directors.
  • Cognate Business Experience.
  • Good track Record
  • Comprehensive Company structure.
  • Provide other requirements as the Fund may demand.
Must the vessels to be procured be brand new ?
The general principle in ship market is that the vessels should be serviceable so age is not paramount. However, the vessel under consideration must not be more than 10 years old, and these may involve reconstructed or reconditioned vessels.
Can the CVFF be accessed in the case of refinancing an existing loan ?

a) In the case of refinancing, it shall be restricted to 80% of the original cost of the equipment/vessel being refinanced or its market realizable values whichever is lower.
b) The tenor of date of acquisition from the date of the refinancing request should not exceed twelve (12) calendar months.